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The recent trend shows that courts begin to recognise the duty to consider creditors'
interests and are willing to lift the corporate veil in order to hold that the directors
had breached their duty, and hence are liable for their actions. This does not connote
that courts have abrogated the principle in Salomon v A. Salomon Co Ltd, 76 because
of the exception allowed in the case.
It would be worthwhile to look at the development in the USA on this issue,
particularly the constituency statutes. The statute provides directors discretion to
consider the interest of creditors, employees and others in making business decision.
By allowing directors to do so, the statute may be seen as a revolution in corporate
law, 77 a view which was shared by the Steering Committee 78 when refusing to adopt
the stakeholders approach. For this reason, the American Bar Association Committee
on Corporate Laws decided not to include such provision in the Revised Model
Business Corporation Act. 79
The Constituency Statutes provide the same concept as in the Corporation legislation
by expressing the duty in the most general terms possible. 80 As such, the statute
76 [1897] A.C 22. Lord Halsbury L.C stated at page 30 “I am simply dealing with the provisions of the
statute, and it seems to me to be essential to the artificial creation that the law should recognize only
that artificial existence - quite apart from the motives or conduct of individual corporators. …I do
not at all mean to suggest that if it could be established that this provision of the statute to which I
am adverting had not been complied with, you could not go behind the certificate of incorporation
to show that a fraud has been committed… .But short of such proof it seems to me impossible to
dispute that once the company is legally incorporated it must be treated like any other independent
person with its rights and liabilities appropriate to itself…..”
77 Marleen A O‟ Connor Corporate Malaise –“Stakeholder Statutes: Cause or Cure” [1991] Stetson
LR 4.
78 See Company Law Review Steering Group “Modern Company Law For a Competitive Economy:
The Strategic Framework” A Consultation Document (DTI, London, 1999)
at June 2010 and also remedy codified for breach of
directors‟ duties.
79 O‟ Connor above n77 at 4; See also John Farrar, Corporate Governance Theories, Principles and
Practice (3 rd Ed., Oxford University Press, South Melbourne, 2008) at 31 [“Corporate Governance”].
80 Morey W. McDaniel “Stockholders and Stakeholders” [1991] Stetson LR 121 at 126; see also
Farrar Corporate Governance above n79 at 31.
88